IT Spending by Small and Medium Sized Businesses Hits New High

Blog

Home»Blog» IT Spending by Small and Medium Sized Businesses Hits New High

While IT firms often focus their attention on landing contracts with big businesses, recent research has suggested that may not be the best approach. Spending by small and medium sized businesses on IT services has significantly increased over the last few years, perhaps signalling a trend towards smaller, mobile businesses in an industry that is changing every single day.

During the dark days of 2008 and 2009, spending on IT-related services by small and medium sized businesses (SMBs) shrunk to a dismal low. Now, in 2012, SMB IT spending is expected to reach an all-time high of $138 billion – far eclipsing the losses that the industry was dealt during the recessionary years.

Small and medium sized businesses (those with 999 employees or fewer) spend differently than large-sized businesses (those with over 1000 employees). While large businesses spend over 50% of their IT budgets on IT services, smaller businesses devote a greater portion to computers, peripherals, and related equipment costs.

They’re also some of the largest consumers of packaged IT software, with over one-third of SMB IT spending going towards that market.

What can software manufacturers and IT service providers learn from this data? Well, if you want your business to meet the demands of the market, then you’re going to need to cater to small and medium sized companies. While getting a huge contract from a large business is always a good thing, IT firms who want to capitalize on their growth should start advertising to SMBs as well.

It can also be seen as a sign of the times: today, businesses that can quickly adapt to the changing IT environment will survive longer than those that cannot. With computer technology changing at an increasingly more rapid pace, smaller and medium sized companies could be becoming the new economic powerhouses.

This information comes from the International Data Corporation (IDC) and the Wall Street Journal. The IDC is the world’s leading provider of statistical information for the IT industry, and uses its network of analysts, strategists, and business professionals to anticipate changing trends in the PC industry.